AUGUSTA, Ga., July 30, 2010 (GLOBE NEWSWIRE) -- Southeastern Bank Financial Corp. (OTCBB:SBFC), the holding company for Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust of Aiken, S.C.(SB&T) , today reported quarterly net income of $1.6 million for the three months ended June 30, 2010, or $0.24 in diluted earnings per share, compared to $637,000, or $0.10 in diluted earnings per share, in the second quarter of 2009.
"We made good progress during the second quarter of 2010, building on the momentum and profitability we achieved in the first quarter," said President and Chief Executive Officer R. Daniel Blanton. "Our income and earnings are up solidly from a year ago, with strong growth in core deposits and significant increases in retail investment and trust income, including substantial contributions from our SB&T subsidiary. Although credit quality remained relatively stable, our loan loss reserves continued to increase, based primarily on economic factors. And while our mortgage income is less than it was a year ago, it is holding up relatively well given the depressed housing market."
Total assets at June 30, 2010, were $1.6 billion, an increase of $89.8 million from Dec. 31, 2009. Assets at the company's SB&T subsidiary totaled $175.7 million at the close of the second quarter, an increase of $16.1 million, or 10.1 percent, from Dec. 31, 2009. Assets at GB&T increased to $1.40 billion at June 30 from $1.33 billion at Dec 31, 2009, an increase of $76.1 million, or 5.7 percent.
Loans outstanding at the end of the second quarter were $933.3 million, compared to $981.7 million a year ago. Total deposits were $1.4 billion at June 30, 2010, an increase of 15.1 percent from $1.2 billion for the same period a year ago. Cash and cash equivalents totaled $123.8 million at the end of the second quarter, compared to $112.2 million at the end of the first quarter and $148.0 million at Dec. 31, 2009.
Net interest income for the second quarter of 2010 totaled $11.4 million, a 6.0 percent increase from $10.7 million for the same period in 2009. The net interest margin was 3.19 percent at June 30, 2010, compared to 3.18 percent a year ago.
Noninterest income for the second quarter totaled $5.2 million, compared to $5.9 million a year ago, due to decreases in gains on sales of investment securities and mortgage loans. Despite the year-over-year decline in noninterest income, retail investment income increased 30.8 percent, and trust income increased 18.3 percent from a year ago. Noninterest expense was $10.6 million in the second quarter, a decrease of 2.3 percent from $10.8 million a year ago, resulting from lower problem loan-related expenses and increased efficiency in the company's operations.
The company's loan-loss provision was $3.8 million in the second quarter of 2010, which compares to $3.3 million in the first quarter of 2010 and $5.1 million a year ago. The allowance for loan losses at June 30, 2010, were $23.8 million, or 2.65 percent of loans outstanding, compared to $23.1 million, or 2.52 percent of loans outstanding, at March 31, 2010, and $22.3 million, or 2.38 percent, at Dec. 31, 2009.
Nonperforming assets at June 30, 2010, were 2.53 percent of total assets, compared to 2.52 percent at March 31, 2010, and 3.65 percent at June 30, 2009. Net charge-offs for the second quarter of 2010 totaled 1.37 percent of average loans, compared to 1.07 percent in the first quarter of 2010 and 0.43 percent in the second quarter of 2009. The company held $7.2 million in foreclosed property or other real estate owned (OREO) at June 30, 2010, compared to $8.0 million at December 31, 2010, and $13.8 million at June 30, 2009.
Annualized return on average assets (ROA) was 0.42 percent for the second quarter of 2010, and annualized return on average shareholder's equity (ROE) was 6.55 percent.
Net income for the six months ended June 30, 2010, totaled $2.9 million, compared to $693,000 for the same period of 2009. Diluted earnings per share for the first six months of 2010 were $0.43, compared to $0.11 per share earned in the same period a year ago.
Net interest income for the first six months of 2010 was $21.9 million, compared to $20.8 million in the first six months of 2009. Noninterest income was $9.2 million for the first six months of 2010, compared to $10.5 million in the same period of 2009. Noninterest expense was $20.0 million for the six-month period ended June 30, 2010, compared to $20.6 million in the same period in 2009.
"We are pleased with the improvements we have made in our operations to this point in the year," said Blanton. "Having resolved a substantial amount of our problem assets in 2009, we have been able to focus on the basics of banking – making sound loans, attracting deposits, and generating income and earnings while serving our communities. That said, given the continuing uncertainty in real estate markets and the broader economy, we will continue to keep a watchful eye on our problem assets and expenses as we work to further enhance our core banking operations, profitability and shareholder value."
About Southeastern Bank Financial Corp.
Southeastern Bank Financial Corp. is the $1.6 billion-asset bank holding company of Georgia Bank & Trust Company of Augusta (GB&T) and Southern Bank & Trust (SB&T). GB&T is the largest locally owned and operated community bank in the Augusta metro market, with nine full-service Augusta-area offices and an office in Athens, Ga. SB&T is a federally chartered thrift serving the Aiken County, S.C., market, with three full-service offices. The company also has mortgage operations in Augusta and Savannah. The banks focus primarily on real estate, commercial and consumer loans to individuals, small to medium-sized businesses and professionals, and also provide wealth management and trust services. The company's common stock is publicly traded on the OTC Bulletin Board under the symbol SBFC. For more information, please visit the company's Web site, www.georgiabankandtrust.com.
Safe Harbor Statement – Forward-Looking Statements
Statements made in this release by Southeastern Bank Financial Corporation (The Company) other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management's belief as well as assumptions made by, and information currently available to, management pursuant to "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including: unanticipated changes in the Bank's local economy and in the national economy; governmental monetary and fiscal policies; deposit levels, loan demand, loan collateral values and securities portfolio values; difficulties in interest rate risk management; difficulties in operating in a variety of geographic areas; the effects of competition in the banking business; changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions; failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans; and other factors. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES | ||
| Consolidated Balance Sheets | ||
| June 30, | ||
| 2010 | December 31, | |
| Assets | (Unaudited) | 2009 |
| Cash and due from banks | $ 99,209,845 | $ 123,660,855 |
| Federal funds sold | 7,300,000 | 7,300,000 |
| Interest-bearing deposits in other banks | 17,275,839 | 17,032,784 |
| Cash and cash equivalents | 123,785,684 | 147,993,639 |
| Investment securities | ||
| Available-for-sale | 455,049,756 | 306,216,156 |
|
Held-to-maturity, at cost (fair values of $311,535 and $491,860, respectively) |
310,000 | 490,000 |
| Loans held for sale | 33,142,457 | 19,156,943 |
| Loans | 900,166,618 | 937,489,634 |
| Less allowance for loan losses | 23,826,118 | 22,338,255 |
| Loans, net | 876,340,500 | 915,151,379 |
| Premises and equipment, net | 30,524,166 | 31,702,655 |
| Accrued interest receivable | 5,631,645 | 6,090,791 |
| Bank-owned life insurance | 23,699,999 | 23,247,879 |
| Restricted equity securities | 6,337,700 | 6,337,700 |
| Other real estate owned | 7,204,735 | 7,973,830 |
| Prepaid FDIC assessment | 5,870,757 | 6,886,319 |
| Deferred tax asset | 8,839,482 | 11,159,725 |
| Other assets | 4,191,410 | 8,711,716 |
| $ 1,580,928,291 | $ 1,491,118,732 | |
| Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 118,211,971 | $ 114,780,339 |
| Interest-bearing: | ||
| NOW accounts | 318,982,247 | 210,437,831 |
| Savings | 382,696,678 | 343,739,778 |
| Money management accounts | 36,478,822 | 44,780,787 |
| Time deposits over $100,000 | 370,040,787 | 418,750,941 |
| Other time deposits | 145,031,757 | 148,044,382 |
| 1,371,442,262 | 1,280,534,058 | |
| Securities sold under repurchase agreements | 448,503 | 3,187,807 |
| Advances from Federal Home Loan Bank | 72,000,000 | 77,000,000 |
| Other borrowed funds | 900,000 | 600,000 |
| Accrued interest payable and other liabilities | 11,383,744 | 13,106,706 |
| Subordinated debentures | 22,946,646 | 22,946,646 |
| Total liabilities | 1,479,121,155 | 1,397,375,217 |
| Stockholders' equity: | ||
|
Preferred stock, no par value; 10,000,000 shares authorized; 0 shares outstanding in 2010 and 2009, respectively |
-- | -- |
|
Common stock, $3.00 par value; 10,000,000 shares authorized; 6,673,925 and 6,672,826 shares issued and outstanding in 2010 and 2009, respectively |
20,021,775 | 20,018,478 |
| Additional paid-in capital | 62,488,234 | 62,359,597 |
| Retained earnings | 15,567,428 | 12,692,134 |
| Treasury stock, at cost; 0 shares in 2010 and 2009, respectively | -- | -- |
| Accumulated other comprehensive income (loss), net | 3,729,699 | (1,326,694) |
| Total stockholders' equity | 101,807,136 | 93,743,515 |
| $ 1,580,928,291 | $ 1,491,118,732 | |
| SOUTHEASTERN BANK FINANCIAL CORPORATION AND SUBSIDIARIES | ||||
| Consolidated Statements of Income | ||||
| (Unaudited) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2010 | 2009 | 2010 | 2009 | |
| Interest income: | ||||
| Loans, including fees | $13,516,261 | $14,205,517 | $26,859,707 | $28,009,973 |
| Investment securities | 3,955,152 | 3,595,108 | 7,374,533 | 7,669,487 |
| Federal funds sold | 24,317 | 16,170 | 44,260 | 40,622 |
| Interest-bearing deposits in other banks | 72,639 | 18,097 | 144,789 | 21,934 |
| Total interest income | 17,568,369 | 17,834,892 | 34,423,289 | 35,742,016 |
| Interest expense: | ||||
| Deposits | 5,319,108 | 6,009,384 | 10,686,166 | 12,810,186 |
| Federal funds purchased and securities sold under repurchase agreements | 5,019 | 94,767 | 15,857 | 206,236 |
| Other borrowings | 890,582 | 1,022,528 | 1,845,122 | 1,918,465 |
| Total interest expense | 6,214,709 | 7,126,679 | 12,547,145 | 14,934,887 |
| Net interest income | 11,353,660 | 10,708,213 | 21,876,144 | 20,807,129 |
| Provision for loan losses | 3,793,636 | 5,113,619 | 7,082,135 | 9,862,916 |
| Net interest income after provision for loan losses | 7,560,024 | 5,594,594 | 14,794,009 | 10,944,213 |
| Noninterest income: | ||||
| Service charges and fees on deposits | 1,748,757 | 1,737,117 | 3,343,206 | 3,377,842 |
| Gain on sales of loans | 2,222,022 | 2,460,735 | 3,575,301 | 4,697,431 |
| Gain (loss) on sale of fixed assets | -- | (42,284) | 27,024 | (16,149) |
| Investment securities gains (losses), net | 149,269 | 1,101,311 | 161,944 | 1,312,330 |
| Other-than-temporary loss | ||||
| Total impairment loss | -- | (815,967) | -- | (1,190,967) |
| Loss recognized in other comprehensive loss | -- | 572,108 | -- | 572,108 |
| Net impairment loss recognized in earnings | -- | (243,859) | -- | (618,859) |
| Retail investment income | 416,077 | 317,986 | 751,089 | 527,138 |
| Trust service fees | 289,410 | 244,626 | 576,564 | 497,970 |
| Increase in cash surrender value of bank-owned life insurance | 223,044 | 213,421 | 452,120 | 393,635 |
| Miscellaneous income | 156,145 | 123,054 | 317,264 | 286,328 |
| Total noninterest income | 5,204,724 | 5,912,107 | 9,204,512 | 10,457,666 |
| Noninterest expense: | ||||
| Salaries and other personnel expense | 5,914,348 | 5,800,167 | 11,408,877 | 11,458,101 |
| Occupancy expenses | 1,166,058 | 1,140,367 | 2,337,103 | 2,281,491 |
| Other operating expenses | 3,481,113 | 3,868,152 | 6,247,731 | 6,902,555 |
| Total noninterest expense | 10,561,519 | 10,808,686 | 19,993,711 | 20,642,147 |
| Income before income taxes | 2,203,229 | 698,015 | 4,004,810 | 759,732 |
| Income tax expense | 582,600 | 60,772 | 1,129,515 | 66,365 |
| Net income | $ 1,620,629 | $ 637,243 | $ 2,875,295 | $ 693,367 |
| Basic net income per share | $ 0.24 | $ 0.10 | $ 0.43 | $ 0.11 |
| Diluted net income per share | $ 0.24 | $ 0.10 | $ 0.43 | $ 0.11 |
| Weighted average common shares outstanding | 6,673,925 | 6,348,312 | 6,673,631 | 6,169,125 |
| Weighted average number of common and common equivalent shares outstanding | 6,673,968 | 6,354,344 | 6,673,631 | 6,177,569 |